Why Brexit is Northern Ireland’s Greatest Business Opportunity

It’s remarkable how many people – people who have never run a business – have suddenly become business or economic experts since the United Kingdom decided to leave the European Union. This is especially the case here in Northern Ireland. Few of our politicians (with some notable exceptions) have ever started or run a business. The local Director of the CBI has never run a business. But the consensus view of these economic ‘experts’ – many of whom campaigned hard for a remain vote in last June’s referendum – is that Brexit spells disaster for Ireland, North and South. They also argue that the UK’s decision to leave the customs union and single market means a hard border etc., and that will result in ruin.

But most businesses in Northern Ireland don’t trade across any borders. And, for Northern Ireland, Brexit is a once in a lifetime opportunity to take advantage of a revitalised UK, our most important trading partner.

The UK is our biggest trading partner by a vast margin – grossly more important than any EU market. In fact 86% of sales by Northern Ireland companies stay right here in the UK.

And it is for this reason that Brexit is the biggest opportunity that Northern Ireland has ever had since its inception. Northern Ireland, in short, just got lucky. The UK is a huge market on Northern Ireland’s doorstep. It’s also a free market with no customs checks or borders. And it also happens to have at its heart the world’s largest financial trading centre in the City of London.

Just look at the numbers.

The construction sector here employs around 30,000 people. The manufacturing sector employs around 80,000. Meanwhile the services sector employs close to 600,000 people – dwarfing all other sectors.

Now let’s consider this services employment number. Ask yourself, how many of these people are involved in businesses that trade across the border with the Irish Republic? The answer – very, very few.

Northern Ireland is a typical, regional, services-based economy. A look at the list of our biggest employers shows that most are UK based services businesses and retailers like Tesco, Asda, Sainsbury, the big banks and insurance companies…and call centres. There are a few big businesses that might do some cross-border trade, like MoyPark. But most don’t. And most of our small and medium businesses – hairdressers, plumbers, bathroom fitters etc. – focus their entire sales and marketing effort on a 20 mile radius of where they are based.

Indeed, the vast majority of our small businesses are one-man/woman bands that engage in precisely no cross-border or international trade. These businesses are wholly focused on Northern Ireland which is an integral part of the UK’s own single market – the world’s fifth largest economy. We’re also a member of the UK’s sterling based currency zone (and more about that later).

Our total exports to the Republic of Ireland declined by £143 million last year and amounted to £3.4 Billion. But total sales to Northern Ireland and Great Britain amounted to £57.5 billion or 17 times greater than our sales to RoI. And, of course, there’s no reason why those sales to Ireland can’t continue post Brexit – we already sell goods to Ireland despite being in a different currency zone and applying different VAT rates.

Recently I attended the all-Island “dialogue” on Brexit in Dublin. The representatives from Northern Ireland (which was exclusively called “the North” at the event, except by representatives of the Irish government) included the local Director of the CBI, various pro-remain political parties and various EU-funded border quangos. These people gave the impression to the assembled hordes of virtue signallers that most people in Northern Ireland were engaged in trading beef carcases across the Irish border and that a hard border (presented as inevitable) would spell doom for Northern Ireland, Ireland and the peace process. This analysis is not just flawed – it’s cynical, and wrong.

By comparison, on Tuesday of last week, I attended an evening function in Canary Wharf in London sponsored by Belfast City Council. The event was launching a new Belfast-London business network and was attended by hundreds of business people. Most were London based and most wanted to hear about why Belfast had become such a desirable location for financial services businesses. The reason is simple. Belfast is much cheaper than London, can provide a better quality of life and has a ready supply of talented people. And if such people can’t be found here there are quite a few professionals based in London very keen to have a life change, avail of cheaper housing and get to walk in the Mournes at the weekend.

It’s not by accident that Belfast has become one of the most important financial services and fintech centres in the UK. Unlike Dublin we’re in the Sterling zone, our law graduates understand UK common law, and we have a superb digital infrastructure.

That’s why, according to TheCityUK, around 18,000 people in Belfast alone are employed in the sector. Across Northern Ireland more people now work in financial services than work in construction. It’s a key reason why just about every major law firm in the city of London squeezed into the auditorium in Thomson Reuters in London last Tuesday night to hear about the success story that Belfast has become.

The United Kingdom is now one of the fastest growing economies in the world and is home to the world’s largest financial trading centre. London’s traders sell twice as many euros as all the countries of the Eurozone combined, and London’s three main clearing houses handle around €1 trillion of euro trades daily. And, of course, the UK isn’t even part of the Eurozone. Such is London’s dominance.

Belfast, and Northern Ireland’s, biggest trading partner is the UK. Thankfully, that will continue to be the case after Brexit. The devaluation of Sterling has had zero impact on our ability to trade with the rest of the UK. But it has seriously spooked Dublin.

In fact, Ireland is facing an existential crisis because of Brexit. Because of the country’s low corporation tax rate Ireland has become disproportionately dependent on foreign direct investment (FDI). US companies now dominate Ireland’s export trade with pharmaceutical companies exporting huge volumes to the USA and the EU. Pharma products are shipped bulk to Antwerp where they are packed. They’re also shipped to North America. Pharma businesses are attracted to Ireland because of its low corporation tax rates – a competitive advantage now under threat by President Trump and the EU Commission.

Meanwhile Ireland’s indigenous businesses – typically agribusinesses – are highly dependent on the UK market. Since Sterling devalued after the EU Referendum, Ireland exporters have been disproportionately affected. The UK is Ireland’s second largest trading country after the United States but the UK is by far the most important market for indigenous (non-FDI) businesses. Meanwhile Northern Ireland based exporters to RoI have benefitted from Sterling devaluation.

In short, few businesses in Northern Ireland will be affected by Brexit. The relatively few businesses that trade across the border are not the businesses that employ the lion’s share of service sector employment. These businesses, in short, are highly dependent on Northern Ireland being part of a huge, growing trading partner that happens to be very international and on our doorstep and it’s called the United Kingdom.

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About Jeff Peel

Free market libertarian. Businessman. Small government advocate. Former Vice-Chair, Conservative Party in NI. Fellow, Institute of Economic Affairs. Former Regional Chair, Business for Britain (the business voice of VoteLeave).

Jeffrey I have heard this said before by clampits. i expect more from someone like yourself who appears to have some semblance of intelligence. The EU market is $19.1 trillion. I believe it to be the largest free market in the world. The UK market makes up around $2.91 trillion. Which market do you think will be more effected considering there is a balance of around £7 billion in the UK’s favour.
If you used the same analogy then the UK cannot do without the Irish market as there is a £7 billion balance in favour of Ireland. Your logic does not follow through.
I accept the fact that you trade freely with other non EU countries without the need to pay for access but that right was negotiated by the EU. The attraction of such a deal was to give access to the EU market.
An interesting point to be made about the trade deal made between China and Switzerland, it resulted in immediate access of China to the Swiss market yet the Swiss access to the Chinese market was phased over seven years.

Jeffrey Peel

The attraction of such a deal was not to – as you suggest – give access to the EU market. The EEC was essentially a free trade zone that turned into a customs union and now is becoming a political union. Members were members before this momentum towards political unification started. So the initial ideal was trade now it has become a lumbering pit of waste with no real political accountability. Trade happens between businesses without the need, more often than not, for permission from civil servants. That trade will continue after the UK leaves the EU. In all likelihood it will be free trade (or near free trade under WTO rules).

Skibo

Jeffrey, I have had a quick look at the figures and the one thing that jumps out at me is how inverted we are in NI.
Ireland was the same and it was not until she started looking past the UK that the economy took off.
Pre EEC membership the UK made up 55% of Ireland’s exports. It is now sitting around 12.7% on a par with Belgium.
Ireland exported $128.1Billion last year.
NI, which has a 40% of the population of Ireland exported £9.1 billion plus the £13.8 billion we did to the UK. We are streets behind Ireland and destined to remain there while we pin our hopes on a UK government who look on us as the ideal home for call centres.

Jeffrey Peel

Totally agree. I also have huge admiration for Ireland’s attitude. I spend a lot of time in Dublin. We can learn a lot.

Ciaran O’Neill

Charles Haughey taught him economics mg, behave yourslf

chrisjones2

But there are 65 m in Britain

chrisjones2

I was going on what others had said – made in Dublin bottled here

chrisjones2

Like now?

Hopefully we will be cleverer than that and develop higher vtech solutions that deliver better jobs

And all these new deals will be superior to what’s there at present and access to the single market will be free and there will be a ban on immigration from the EU , if the UK achieves even one of these objectives it will be doing well. Jeffrey you didn’t mention who is going to pick up the tab for the privilege of trading without tariffs with the EU , nor do you mention the quota system that will be imposed by the EU with regard to immigration much to the chagrin of the Tory right wing whose big idea Brexit was in the first place.

scepticacademic

Quite possibly. And no, of course not.

Skibo

OH so it is the lack of input or permission of British Civil Servants that you loath!
As far as I am aware the European parliament is elected by all the countries in the EU, correct?
The general guidelines of the EU are decided by the European Council, which is the heads of parliament of all the EU states and the President of the European commission. The President does no however have a vote in the proceedings. I assume the head of each of the parliaments are elected by their relative countries?
The European Commission sets regulations and laws for the EU as directed by the European Council.
The Commission is made up of 28 Commissioners appointed by the governments (that were elected by the people).
The regulations, laws and trade deals have to be approved by the European Parliament which is elected by all the countries of the EU.
Please explain where the lack of political accountability.
That trade will only continue if it is economically viable. It is all about the balance sheet.

Skibo

Jeffrey will “the country of origin” issue be as easily resolved?

Skibo

As far as I am aware the nationalist electorate voted substantially in favour of Brexit. Was it not the Unionist areas that voted for Brexit. I didn’t think they listened too much to SF or were you considering SF hitting the streets in Britain to sell the message of Remain?

Skibo

We could learn even more if we harmonised our economy to theirs and forgot the GB link that has resulted in the NI economy drifting into oblivion.
Time to move positively to reunification and progress.

Skibo

So after ten years if we are still buddies with Westminster, we can expect a serious increase in unemployment.

Obelisk

Why do i get the feeling that ‘Brexit will be good for Northern Ireland’ is not a conclusion arrived at from looking at all the available evidence, but a statement the author began with and then worked to construct a narrative supporting it?

Fear Éireannach

The reality is the Brexit offers almost nothing positive to NI, and many many negatives which are several orders of magnitude larger than any positive and much more likely to happen.

Ciaran O’Neill

Yep, you’re pretty much bang on the money there. In his infinite wisdom the bearded crocodile plotted brexit years ago before he forced David Cameron into campaigning for an in/out referendum on europe. All in the hope that one day a shinner could man a mock customs checkpoint made up of a homebase garden shed, sandwich board and an oul trenchcoat from oxfam

Skibo

Jeffrey has honed in on a very important issue and that is services. Nearly 80% of the UK economy is based on services.
40% of UK services is based in European Economic area along with 56% of its trade in goods.
If the UK cannot achieve a free trade agreement this will all be under threat. Financial services in particular, normally within a trade agreement require a financial passport which in turn requires the business to have a European base. That means the tax is paid at source.
One of the hardest things to get agreement on is Services.
So in the act of leaving the EU, the UK is prepared to put at risk the largest section of it’s economy.
Have I got anything wrong Jeffrey?

Skibo

How about we have a scheme for new start businesses where for every pound they spend we give them £1.60? Just a thought.

Jeffrey Peel

You’re very wrong. Passporting is a non-issue for the vast majority of city trades that are conducted on the wholesale market. EU equivalence rules mean that most global banks in London will be able to trade just as they do at present.

Brendan Heading

I’d point out, once again, that everyone who knows anything about the issue of brexit – economists, accountants, people who run businesses, people in government – believes it will be a disaster. The last UK Prime Minister was a brexit supporter, until he became the leader of the opposition and saw at first hand what the implications would be. This is also true of at least one of the present secretaries to the Treasury. Large parts of the cabinet, including the Chancellor of the Exchequer and the Prime Minister, know that brexit won’t work and campaigned against it. This is a consensus opinion among knowledgeable people. It’s not the consensus of the UK public, of course, but it is the consensus among people who run things and understand the interconnected nature of the world and the economies within it.

There are businesses who believe they will be successful under brexit, but they are few and far between. Most of them think it will go wrong.

Jeff’s explaining the effect on the economy as it currently stands. I need not remind everyone that NI’s economy as it stands is hardly a shining example of economic success. Sure, it’s making strides and there is good progress. But I don’t want to hear that it will be OK as it stands now; I want to know where its future lies. And it strikes me that closing down access to our nearest markets outside of the UK in favour of an inward-facing British economy is a huge fallacy.

There is little point in arguing about this because I believe most of the brexit supporters are settled in their views. But what we are dealing with here is not facts or expert opinion, but articles of faith. All they’ve got about the UK’s future trade relationships with the world is speculation, and in the case of the UK government, a load of piffle about biscuits and jams. Brexit is – in the most diplomatic terms I can think of – a gamble, an uncalculated risk. What we’re hearing are akin to the words of a degenerate telling the other drunks in the bar what he’s going to do when he wins the lottery.

Gavin Smithson

Globalization is a positive force as it spreads jobs and wealth from rich countries to poorer ones.

Yes there is pain felt by the richer nations but poor countries, like people, do not become wealthier by charity collections (I know charity eases our guilt) but by economic investment.

The west is only wealthy due to our past and present exploitation of poorer weaker nations. It’s funny how socialists speak anti colonialism from one side of their mouth yet speak anti globalization from the other.

It’s time we made up our minds and put our money where our mouths are. If we want Kenya, Phillipines, Burundi, Botwana etc to improve their quality of life then we have to accept that firms may have to invest there and not here.

Charity does not begin at home. It begins where it’s needed.

NI will find leaving the EU hard but having to run in rarified air will only make us fitter

Kevin Breslin

The “fantastic opportunity” you mention is the UK market that Northern Ireland already had and a UK market that is likely to decline under Brexit and higher inflation.

I’d laugh but the joke is almost criminal.

I’d be like me saying, “Jeff can I have a quarter your money and property for absolutely nothing … it’d give you a fantastic opportunity to build character and start again.”

Kevin Breslin

So basically the UK is going to adopt EU equivalence rules it will no longer have a say in like Switzerland does.

Frankfurt is where the smart money is going to be I guess.

Kevin Breslin

Any political entity can have an economy so long as they have commerce and trade.

Kevin Breslin

Optimism is enough for Tories like Jeff Peel. Adam Smith’s invisible hand will do the rest, Laws of Physics, Free Will or other Esoteric Supernatural Forces we don’t understand yet be damned.

Damien Mullan

If they aren’t moving out of London then why move to Belfast? Unless you’re talking about back office functions.

Frankly, I don’t see the Trump administration as a major threat. Not unless the U.S. manages to figure out how to slice Hawaii from the earth’s crust, sail the islands to the Panama canal, presumably turning them on their side to squeeze them through, then sailing them northwards and anchoring them just off the west coast of France. The U.S. could then take advantage of membership of the EU with a portion of its landmass in the vicinity. Barring this extraordinary engineering and physics feat however, I don’t see what the existential threat to Ireland the U.S. poses with a reduced corporate tax rate.

Ireland within the EU with a corporate tax rate of 12.5%, able to export within a single market and customs union of some 450 million people post Brexit, will always have major advantages. An English speaking population and common law system only adds to this unique selling point. It must be stated that Ireland’s institutional expertise is very strong, the stellar professionalism of the IDA and the National Treasury Management Agency, both of which came out of the financial crisis and the years hence with their reputations enhanced, even if their best efforts were unable to avoid the bailout, all of which is a reflection of the depth of skills and and reserves of talent available.

I also think you underestimate that for many nationalists in the north being a mere regional gear of a wider UK economy is utterly unacceptable, nationalists are more ambitious for this place, north and south. Nationalists aim for the stars, or at least, like Ryanair, the skies, an Irish success story with no Northern Ireland equivalent, which dominates the airline industry not only between these islands, but across an entire continent of 750 million people. David McWilliams best illustrates the dilemmas for Northern Ireland within the British union, past, present, and future.

“A cursory glance at the performance of the Northern Irish economy since 1922 would suggest that the Union has been an economic disaster for the people of Northern Ireland. They have been impoverished by the Union and this shows no sign of letting up. The only solace the Northerners might hold onto is the fact that all British regions have lost out income-wise to Southern England; however, “we’re all getting poor together” is hardly a persuasive chorus for an ode to the Union. Indeed, the relative under-performance of the once-rich Scottish economy was (and is) a central argument of the Scottish Nationalists in the last referendum.
However, forget the other British regions: the contrast between the economic performances of the North and South is shocking.

If we go back to 1920, 80 per cent of the industrial output of the entire island of Ireland came from the three counties centred on Belfast. This was where all Irish industry was. It was industrial and innovative; northern entrepreneurs and inventors were at the forefront of industrial innovation. By 1911, Belfast was the biggest city in Ireland, with a population of close to 400,000, which was growing rapidly. It was by far the richest part of the island.

In contrast, the rest of the Irish economy was agricultural and backward and the only industrial base we had could be termed a ‘beer and biscuits’ economy, dominated by the likes of Guinness and Jacobs.

Fast-forward to now and the collapse of the once-dynamic Northern economy versus that of the Republic is shocking. Having been a fraction of the North’s at independence, the Republic’s industrial output is now ten times greater than that of Northern Ireland. Exports from the Republic are €89 billion while from the North, exports are a paltry €6 billion. This obviously reflects multinationals, but it also underscores just how far ahead the Republic’s industrial base is. Producing 15 times more exports underscores a vast difference in terms of the globalisation of business.

The total size of the Republic’s economy is now four times of that of the North, even though the labour force is not even two and a half times bigger. In terms of income per head, the Republic is now almost twice as rich per person as the North. The average income per head in the Republic is €39,873, while it languishes at €23,700 up North. The differing fortunes of North and South can be easily seen in the fact that, having been smaller than Belfast at the time of partition, the population of the greater Dublin area is now almost three times bigger than the greater Belfast metropolitan region.

Obviously there are significant differences in terms of prices, access to public services and housing between the two parts of the island, but the fact remains that the Union has been an economic calamity for everyone in the North. The contrast is made more significant by the fact that economically the North was, at one stage, so far ahead of the South. So where does that leave us?

Well, in the distant past, there was good reason to believe that the Union preserved living standards in the North, but this is a myth and has not been the case since 1990. Indeed, the end of the Troubles, which should have marked the resurgence of the relative performance of the North, has actually delivered the opposite.

Relative to the South, the Northern economy has fallen backwards since the guns were silenced. If there was an economic peace dividend, it went South.

Now with Brexit looming and the concrete and more profound underlying changes in demography, the issue of a united Ireland may be back on the table quicker than most of us imagined – or cared to dread.

Interestingly, Unionists have now an economic incentive to join a united Ireland because the Union is impoverishing them, but I suspect they’d prefer to get poor in a semi-detached UK rather than join a much more coherent all-Ireland economic endeavour.

You don’t agree, for purely chauvinistic political beliefs and no economic insight, you want the people of the North of Ireland to be totally under house arrest and dependency of the “Great Britain” market.

This is why I want Northern Ireland to “Brexit” from the United Kingdom, because the political union run from Westminster doesn’t care about local agriculture, local industry, local labour etc.

Can I say totally agree, but unlike Jeff come across as actually meaning it?

Kevin Breslin

So what you think that means that they want Comber Potatoes shoved down their throat because their shooting in the foot exercise closed down a few other markets?

jporter

Surely the biggest opportunities, by definition, are with countries who aren’t already our biggest trading partners?

Kevin Breslin

Absolutely he’s a Tory, as long as you keep him fat and opinionated he’s fine with anything.

Damien Mullan

Jeff, you have to factor in Sterling’s shocking collapse since June last year when contextualizing that 4.1% fall in the value exports to the South last year. Extrapolating anything out of that singular event as to the health or heft of the trading relationship North and South is unwise.

Jeffrey Peel

And how are you coming across Kevin?

Kevin Breslin

Sorry, but Brexit’s way of encouraging enterprise is similar to The Troubles way of encouraging enterprise … Scorch the Earth once again, destroy existing industries and force the people to leave this place to survive.

Kevin Breslin

Eugh, you two get a room.

Kevin Breslin

Intentionally rude … but I don’t rely on public speaking and commentary for a living.

Seems anyone can stand in front of a room, talk a load of garbage and make a buck out of it.

I could probably pull that act off sometime.

jporter

I’m no expert by any means, but it seems to me that, post-Brexit, the UK will sign a number of trade deals that will allow unfettered access to UK markets and the UK public sector, dilution of standards to suit the countries concerned (US in particular) and free movement of people from the countries concerned.
Unless our agribusiness sector can survive by concentrating on high quality, niche product (which I really hope it can), it will be a race to the bottom and the resultant devastation of our countryside, family farms and the environment.

NMS

But Jeffrey, post EU membership, a company in Dundalk will a) have to pay VAT at point of entry, b) possibly pay customs duties c) fill out myriad forms to obtain goods from Newry. Customs Union, which is what you are describing has been implicitly rejected by the UK Govt. Alternatives are not open under EU rules. Remember the EU has a written Constitution, not one made up on the go. The paperwork alone will ensure that the alternative supplier will win over the UKNI supplier.

The CTA cannot continue because of course Ireland remains part of the EU. All the old agreements are void.

the moviegoer

It’ll be a good practice run for leaving the UK too. Think how fit you’ll be then.

NMS

“Contagion”, I presume you mean enhanced co-operation? Personally, I am in favour of Ireland opting in to the proposals coming from the core States to move forward & see that it is in the interests of Ireland to do so, though it is not in the interest of UKNI.

In relation to CT rates, the objections of the French authorities & others has never been to the Irish tax rate, rather to the way it has been applied, giving an average tax rate closer to 3%.

epg_ie

The North’s already in the UK. It didn’t gain that from Brexit.

The businesses on the border are disproportionately oneuns rather than anotheruns, but you don’t care about the curry yoghurt crocodiles do you?

It’s fine. The North will be back in the EU in a decade or two. Funny I didn’t think that at this time last week, but I change my mind when the facts change.

epg_ie

What Slugger really needs is another middle-aged anti-SF man.

murdockp

This was like a Donald trump speech.

The reason NI will be hit so hard is Westminster is skint.

Farm subsidies and Europe funds will dispear and expenditure will be cut.

It’s that simple

John Collins

A man who claimed he was a graduate of the LSE, but seems never to have studied there.

epg_ie

The EU isn’t “(excluding RoI)”. That’s a convenient little elision.

Kevin Breslin

Sometimes I feel can we just get the Brexit implosion out of the way, so that we can actually go back to economics and industries that don’t have to work against the path of highest resistance all the time?

Go back to the experts in exports who knew something rather than those who’ve been financed by lobbying companies to put out garbage that takes people up a cul-de-sac.

Damien Mullan

To be fair, if Ireland dug it’s heels in and exposed the hypocrisy of France and Germany, whose effective rate has always been much lower than the headline rate too, then I’d think the French and Germany’s would, has they have done in every situation previous, back away. The Germany’s a very lukewarm about harmonization at any rate, I think if they thought it was a serious possibility, the rug would be pulled from under it, they do it now only as a means to apply pressure, but triggering that would open a hornets nest, plus it would rile the eastern Europeans as well, potentially deepening divisions between a ‘two speed’ Europe, which the east is very anxious about.

epg_ie

Plus the only way out of the economic black hole is to cut tax on profits bigly to make businessmen and Conservative donors richer (though unlike the South, the vast majority of UK capital is locally-owned, so the rich would invest anyway).

Kevin Breslin

Don’t Vtech also make electronic toys as well as telephones?

John Collins

Are you suggesting a rerun of the RHI Scheme?

Kevin Breslin

Under WTO arrangements that are likely to remain in place a long time after Brexit.

Kevin Breslin

We’re part of Ireland, one part is tied to a dangerously unstable political union with a flat-lining currency and unaccountable bureaucrats that haven’t a clue how to implement their political decisions … the other part is the Republic of Ireland.

Kevin Breslin

The English Nationalist electorate Skibo …
Not the Scottish, Irish or probably Welsh one either.

And so English nationalism has arisen to destroy England as we know it, haven’t got a clue what it wants to create instead though.

Sliothar

Reminds me of the sign over a large ham in a pork butcher’s shop in old Sandy Row in the 60s:
‘Cured in Ulster
Not in Lourdes’.

Kevin Breslin

That’s a cumulative number … and to be frank, transporting goods from Louth to Donegal through the most efficient route means at least four border crossings there and back.

George

“The UK is our biggest trading partner by a vast margin – grossly more important than any EU market. In fact 86% of sales by Northern Ireland companies stay right here in the UK.”

I think that statement needs to be clarified as it can be misleading to some readers. According to the Department For The Economy total sales by companies in Northern Ireland were estimated to be worth £66.7 billion in 2015. This is broken down as follows:

– Sales within NI at £43.7 billion;
– Sales to Great Britain at £13.8 billion;
– External sales at £23.0 billion;
– Exports (sales outside the UK) at £9.1 billion;
– Exports to the Republic of Ireland at £3.4 billion;
– Exports to the Rest of the EU (RoEU, excluding RoI) at £1.9 billion;
– Exports to the Rest of the World at £3.8 billion.

I put these figures up as the 86% figure you cite implies that 86% of trade is with Great Britain. This is not the case. Total sales are £66.669 billion of which £13.8 billion go to Great Britain. So that means 20.7% of Northern Ireland sales are to Great Britain not 86%.

Between 2011 and 2015 the numbers of NI companies selling and exporting outside NI both fell. Now let’s look at the areas you mention, such as construction, manufacturing and services.

Construction makes up £6 billion of the £66 billion total sales with £4.2 billion internal to NI and £1.5 billion to GB.

Manufacturing makes up £18 billion with £3.9 sold in NI and £8.7 billion to GB. The rest goes outside the UK.

Retail and wholesale makes up £25.1 billion with over £21 billion taking place in NI.

So when you break it down, the NI economy is not really making much for export. Make of those figures what you will but all I see is an economy that has few drivers for growth, an economy that survives on the money pumped into it, which is then divided by its citizens spending it on services and goods. How Brexit can be seen to be beneficial is questionable.

You say that 86% of sales stay within the UK. What you don’t say is that figure is made up of 65% of total sales staying within NI. Meanwhile, exports dropped 5% in 2015, hot on a 3.6% drop in 2014. I would be worried by such figures not proud of them.

Kevin Breslin

Well If people are paying me, I can definitely be more dramatic!

Anyway, if you want a sensible conversation about garbage speak to an environmentalist.

The UK government spends £9 billion on waste management, the most expensive of which is nuclear decommissioning, something no part of Ireland ever needed to sign up to.

Kevin Breslin

A lot of that UK capital is kept overseas in places like Panama.

It’s like those rich people don’t want to give anything back to invest in those who could make their nation stronger.

Simply invest in things like defense charities and political groups that help to build their personal ivory towers.

Kevin Breslin

I think it has to be established that the biggest obstacle is Brexit and particular the stupid and superstitious people in the UK cabinet that are administering it.

And the UK are hypocrites because David Davies said they wanted WTO tariffs if they can’t get a deal with the EU, which come with a much higher external tariff.

And also from what I hear the plan is to remove the subsidies nationally and force devolved administrations to use rates and other procurement to fund their own industry.

I honestly think we’ll see those farmers and fishermen enthusiastic about Brexit, going on strike against a British government who basically took away their state insurance in order to prop up their own financial investments in London.

Maybe Farage and Nuttall might even reverse Ferret and protest with them.

“Who do these unelected bureaucrats in Westminster think they are?”

Kevin Breslin

And Non-EU countries like the USA don’t want free trade agreements.

Yet the Brexiteers talk about free trade with everybody, even though their best friend thinks it’s “stupid trade”.

Kevin Breslin

The EU has free trade with Norway on manufactured goods, it does not have free trade with Norway on agricultural goods.

I’m certainly no economist, but the north is already in the UK, why then isn’t it reaping the economic benefits of the union, and why will it take brexit to do it?

Some wishful thinking here it seems.

A more likely scenario will be a Britain first approach to the UK economy, with Westminster huffing and puffing about NI’s over-inflated public sector, no farming subsidies from Brussels, and cross border trade (which is substantial, I know of several businesses which supply to southern clients) seriously affected by trading tariffs.

This piece just flies in the face of the many predictions made of the serious effects that brexit will have on the province.

There’s nothing wrong with a bit of optimism, but I doubt the post brexit NI economy is going to be all sunshine and rainbows like this piece professes.

Timothyhound

Northern Ireland needs trade and inward investment – particularly to secure the value add employment that the low cost back end financial services will never provide. This is especially true given the explosion of artificial intelligence that will make many of these jobs redundant. Meanwhile Brexit makes both trade and investment particularly challenging. Invest NI is up against it trying to compete with the likes of the IDA and Brexit makes it ten times harder. Watching the likes of Nelson McCausland last week cynically and ignorantly put party ahead of the common good was, even by the low standards of local politicians – particularly depressing. The only people in the DUP who just might get it are Simon Hamiliton and just possibly Ian Paisley JR. Otherwise the economic illiteracy of pro – Brexit unionism is doing more to fracture the union and damage Northern Ireland beyond the wildest dreams of the most ardent Provo.

Kevin Breslin

2600 odd votes … 13 candidates beaten by quite a few single candidates

For example …

Patricia O’Lynn of Alliance in North Antrim
Joe Boyle of SDLP in Strangford
Frank McCoubrey of the DUP in West Belfast

Jeffrey Peel

Northern Ireland is in the UK – hence the 86%

Timothyhound

The dairy sector is effectively an all Ireland business. It is more or less fully integrated because of the necessary consolidation needed to compete on a pan – European basis. Unpicking the supply chain is costly and next to impossible. There simply arent the volumes to process competitively in NI and sending liquid milk across the water is totally unrealistic. The naïveté of some posters in this regard is jaw dropping. It isn’t nationalist milk or unionist milk – just milk that supports scores of farming families across the island. Brexit creates a huge risk to the viability of parts of this business where margins are thin and credit tight. None of this bothers May, Brokenshire, Gove and company. They are simply playing out an English Tory fight with UKIP to protect their right hand flank. Nobody seriously believes that they care one bit about a single business in Northern Ireland and no one has been more duped than the DUP and their supporters.

Jeffrey Peel

You think I make a living from “public speaking and commentary”? Goodness.

Timothyhound

Sarkozy was put back in his box fairly sharply by Kenny and Co when it was shown that effective CT rates in France were far lower than the headline rates. It’s why successive French politicians have left the issue alone.

>>Our total exports to the Republic of Ireland declined by £143 million last year and amounted to £3.4 Billion. But total sales to Northern Ireland and Great Britain amounted to £57.5 billion or 17 times greater than our sales to RoI. <<

This is just gobbledygook. You are comparing two different things; NI sales to the Republic with Republic sales to the whole UK.

Damien Mullan

But it’s not part of Great Britain Jeff. It’s legitimate to examine the internal economic relationship of the other island in isolation, just as it is to examine Ireland north and south in isolation, as well as the two islands together. Being efficacious with selective statistical information and deliberately obtuse does little to advance your argument.

Damien Mullan

Brian given you are the moderator why was my post tagged as spam and removed.

Skibo

Jeffrey how would you sell the Reunification package?

Skibo

If we were reunited with the rest of Ireland, do you see the value of exports to the rest of the world increasing or decreasing? What about the value of exports to the EU?

nilehenri

if they are in the same jurisdiction why would they move or invest in belfast?

Jim M

Ciaran, which do you think is more likely: SF think Brexit is a calamity; SF think Brexit is a wonderful opportunity to push for a United Ireland? I think OM has a point. During the run-up to the referendum I saw one single Remain poster on the Falls; in the run-up to the election it was all ‘West Belfast United Against Brexit’. Maybe this is because Brexit 1) exposed PBP foolishness and 2) can be marketed as a Bad Thing that the Brits and the Prods…sorry, Tories and DUP…did to Our Ones?

Englishman Abroad

This isn’t a pro-Brexit piece at all, merely a puff for the Union. Well I never!

Neonlights

“But most businesses in Northern Ireland don’t trade across any borders.” yes that’s true Jeff, a startling insight for most, pity that most of the goods do travel across the borders though.

murdockp

Surely SF and DUP what more for their hard core support than a DLA company car, benefits with the hope of a job in a call centre?

Sitting in to watch Jeremey Kyle every day does not make a successful economy

murdockp

which is why voting for an extreme left wing political party seems bonkers to me

Gingray

Ach Jeff, just keep on rolling here. Brexit has already had a serious impact, particularly on those at the bottom, but it is quite apparent that you and the cause you support do not give a sh!t about them.

Since Brexit, the value of the pound has dropped around 20% against the dollar. Coincidentally petrol has risen by around 20%. Cheers Jeff!

Workers in Northern Ireland already spent more on petrol than any part of the UK, and a lot more than the rest of Ireland.

Now, thanks to Brexit and the fake news espoused by its cheerleaders, they will be paying more.

‘Workers in Northern Ireland already spent more on petrol than any part of the UK, and a lot more than the rest of Ireland.,
That’s probably because so many of them drive absurd distances to work rather than move home. And as for walking, cycling or taking public transport to work, only migrant workers do that sort of thing.
And another thing, it’s a complete myth that road fuel is more expensive in NI than GB.

Old Mortality

‘A more likely scenario will be a Britain first approach to the UK economy, with Westminster huffing and puffing about NI’s over-inflated public sector’
Let’s hope it does more than just huff and puff about it. Bring on direct rule.
As for cross-border trade, I think that a good deal of it will pass unnoticed by customs officers. The EU may impose tariffs but they don’t necessarily have to be enforced with the utmost rigour.

Michael Dowds

Why did you mention that people referred to Northern Ireland as ‘The North’, haven’t you ever heard that phrase used before?

You described the room as full of ‘virtue signalers’, maybe they were actually concerned citizens?

I lost interest in your micro aggression laden rant after that paragraph but soldiered on regardless.

Pray tell Jeff, given that the UK Government has yet to display even an understanding of the complexities of Brexit and its implementation over an 18 month period, can you identify any potential problems that might arise for Northern Ireland/ The North and how these might have to be addressed.

I’m genuinely interested as to whether you’ve actually given this any thought or whether listing a series of factoids about the City of London is intellectual rigor enough for you.

I’ll give you an example, and this is a rather big example but there are literally hundreds more, customs. We’re going to need a new customs code and an IT system to implement that customs code.

So in 18 months were going to need to:
– agree on that customs code,
– go through whatever democratic oversight is needed for its approval,
– agree with the EU whatever information sharing measures are included,
– produce a spec for the IT system required,
– have that spec vetted through the democratic process,
– tender for IT suppliers,
– review and approve tenders (assuming its a single stage tender with no negotiation process),
– allow time for appointed IT provider to design, build and test said IT system (oh yeah, that bit!!!),
– road test said IT system for snagging,
– after all of that implement a national roll-out.

I also left out the bit about Northern Ireland/ THE NORTH and the host of difficulties there (BIP, etc.)

18 months!!! Seriously!!! Seriously!!! And you see no problems on the horizon for this vaunted Brexit.

Absolute fantasy!

Gingray

OM
Northern Ireland aint that big, not sure there are many driving absurd distances to work, as Jeff says most people work within 20 miles of where they live.
I cycle and I was born here, good proportion of people in the office walk, cycle, train or bus (benefits of being in the city centre).
I agree about the petrol price myth btw!

Old Mortality

Any town, village or townland, for that matter.

Old Mortality

Like a lot of other service businesses, they will want to keep a precautionary foot in the EU. Don’t expect them them to actually practise in Dublin, let alone live there.

Jeffrey Peel

The point I made in the piece is that RoI accounts for 5% of our total business sales whereas NI/UK accounts for 86%. In short, the UK is substantially more important than RoI in terms of our trade. If our position on Brexit is to make UK trade more difficult it would be illogical and highly damaging. I’ve heard people suggest that Northern Ireland should remain within the EU single market and customs union, for example. This would ostensibly mean introducing border controls with the UK which would be vastly more damaging. It would also result in a diminution of UK sovereignty – against the wishes of the vast majority of the Northern Ireland population.

As someone who argued for Brexit I’ve made clear that our close trading and political relationship with RoI is very important. Just as the RoI’s trading relationship with Britain is very important. It’s for these reasons that I want zero tariffs between the EU and UK and seamless border controls.

Jeffrey Peel

No I’m not. Our total sales to GB are vastly greater than our sales to RoI. I made no comment on RoI sales to UK.

Jeffrey Peel

Our sales to GB are roughly 4 times that of our sales to RoI.

Jeffrey Peel

The CTA predates the EEC and will continue after Brexit.

Jeffrey Peel

Because it’s much cheaper. Not move to…but augment London front office services with Belfast back office.

Jeffrey Peel

The numbers, while recently published, relate to full year 2015 i.e. period prior to Sterling’s fall.